Money Habits of Entrepreneurs
February 10, 2021
A successful entrepreneur is aware that they need to have a clear purpose, value, and good return on investment for every rupee they spend. Ask any entrepreneur out there about the one skill that is crucial to their success, and the answer you are most likely to get is Financial Management.
Being an entrepreneur means handling the finances of your business as well as your personal finance.
All of us might not be entrepreneurs, but we can learn from successful entrepreneurs’ proven money habits to extend the value of our economic resources. We’ve put together some tried and tested strategies and some entrepreneurs’ money habits that you can adopt to realize your business and financial goals.
- Have clarity about your financial goals
Entrepreneurs are clear about their personal finance’s short- and long-term goals and accordingly work towards it. Get a diary and chart out the financial milestones you want to achieve in the next year, five years and ten years. Develop a plan that is clear and realistic to help you achieve those goals. Lastly, do not forget to continually review your plans and goals and adapt as per the situation.
- Organize your personal finances
Entrepreneurs love nothing more than to watch their money grow! Set a daily, monthly and yearly budget for yourself. Investment in different funds, pensions and have a retirement plan for yourself.
- Adopt a savings mindset
An entrepreneur knows that a healthy financial lifestyle is crucial for growth. The best way to achieve this is by adopting a savings mindset. The first step towards sticking to this habit is putting away the amount you want to save first and then planning your expenses around the remaining amount. Most of us make the mistake of doing this the other way round.
- Diversify your revenue streams
Entrepreneurs are always on the lookout for new opportunities and know better than to invest all their money in one place. Diversification means an opportunity for growth. Educate yourself about the different investment options available to you and create a diverse portfolio of financial products. This will help your money grow and will decrease dependence on one stream.
- Master the use of credit
If there is a battle that entrepreneurs fight daily, it is not to get swamped by the mountain of interest payments. They know better than to spend more on a card than they can pay off in a single billing cycle.
Start by paying off your high-interest debts first to manage personal and business credit better.
- Be frugal
Finances and discipline go hand in hand. Entrepreneurs know they need to be stingy with their money, and they are not ashamed to wear this as a badge of honour. This does not mean that you are living uncomfortably – it just means that you choose to focus on the larger picture rather than give in to instant gratification.
We hope this has helped you understand entrepreneurs’ money habits and how you can adopt them in your lifestyle. It’s not essential to incorporate everything at once, but it’s important to at least start!